The next focusIR Investor Webinar takes places on 14th May with guest speakers from WS Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
Last week's follow-up:
https://parkswatchscotland.co.uk/2023/10/29/the-crisis-at-the-cononish-goldmine-a-national-park-authority-not-fit-for-purpose/
UK law states that workers on unpaid leave can apply for redundancy cash after 4 weeks if they so choose. That deadline has now passed so Scotgold could already have a redundancy liability which they can't pay - although the Govt will pay a basic amount if a company goes bust.
What they needed to do, but couldn't afford, was open up the full length of the vein before extracting any gold. Instead they tunnelled expensively all over the place like a mad mole chasing short-term gold production which they needed in order to raise the next raft of finance. They probably need £10m and an investor who is happy to wait for any return. Maybe Gina Rinehart is their only hope but she would want to take majority ownership away from NFL.
All the assets are pledged as security for existing loans (unless NLR releases them) and any reputable lender would certainly want some asset-backed security with this basket case. Some kind of off-take deal might be possible but with profitability a long way off, that would just make the business less viable.
Rockhead, I take it you haven't been following the Scotgold whistleblower on Twitter?
As for training, it doesn't give you experience. I'm not willing to take a 400 mile road trip in difficult conditions with a driver who has just passed his test. Most of Scotgold's miners were catering workers according to the mole.
Of course, Scotgold had promised to give jobs to local people so they were hoist with that petard. It also saved them money since experienced miners don't come cheap.
They have to pay the going rate when they bring in experienced miners but many of the personnel are trained on site with no prior experience so they earn a lot less. The lack of experience in the workforce has allegedly been a major contributor to their downfall.
Bad timing given today's RNS. Insiders obviously knew long before we did.
No surprise there. This has been a box-ticking exercise leading to a pre-planned administration – which will surely be confirmed this week.
There hasn't been enough selling to warrant the share slide so it looks as though the MMs are trying a tree shake to pick some shrapnel up for their satchel. So I too added 10,000 shares today and in the absence of any change in the company's guidance, I'm ready to buy more if the SP drops further. I also happen to think that Nexus is a standout acquisition for a predator - for around double today's market cap.
I don't think it's necessary or kind for the lucky few who sold at the right time to remind everyone else at this moment.
Failing to meet targets/forecasts isn't a crime, even if it happens repeatedly. Intentionally misrepresenting key facts to investors and lenders would be fraudulent but first you need to prove it. Some of the misdemeanours which *can* be proven are:
1. Fake new gold vein discovery news;
2. Fake first gold pour;
3. Misleading Edinburgh investor presentation;
4. Mining outside the Cononish permit area;
5. Discrepancies between reported and actual production numbers.
Too vague. Which "facts and figures" are you citing?
And while the chairman's AGM comment looks dodgy - especially in hindsight - it's not a crime. There are many legitimate reasons why the BoD might not want to reveal some information to shareholders.
To mount a credible challenge, you need proof of misdemeanours. I believe that SGZ have scammed shareholders, lenders and suppliers left right and centre by making promises they knew they couldn't deliver. But a judge will need to be convinced that SGZ set out to deceive and were not simply (and repeatedly) incompetent, error-prone and/or unlucky. I think there is enough evidence to persuade a court that the fake news spike was an intentional scam so I would go for the low-hanging fruit.
But if you can list some proven misdemeanours which can't be excused by incompetence, etc, let's build a case.
Waste of time without proof of misdemeanours…but anyone who bought shares between 40-66p on the fake news spike earlier this year does have a case against the company since there is evidence from the BBC that the fake news was delivered to them by the former CEO who was preparing for another fund raise. By the time any claim for damages gets to court, the PLC will probably have long ceased to exist but its former directors should still be liable.
BP - this is a pre-administration ritual. They need to show that they have explored all the options in order to pre-empt creditor and shareholder activism when the guillotine falls. Basically, this ritual gives them a defence against daylight robbery when the mine thrives under new (private) owners.
Not much new in there other than a plan to transition to top-down open stoping - and a hint that they may be looking for a scapegoat in their review of last year's mine power upgrade (which they trumpeted as a success at the time). Their lifeline funding negotiations are still described as "highly uncertain" - but imho retail shareholders will be shafted even if they secure funding.
"• Cash position at 30 June 2023: £7.8 million (30 June 2022: £6.68 million)
• Cash position as at 31 August 2023: £9.36 million which includes $4 million upfront milestone payment from Haleon plc"
----------------
Forget the $4m milestone - the bad news is that cash fell from £7.8m to £6.3m in two months (July and August) so they appear to be burning £0.75m per month.
"This man put a lot of cash into the company.I ask myself,was he as thick as mince and led by the directors or was he complicit in the end game."
=====
Baz, I can see various possibilities:
1. He was as thick as mince and fell for the spiel.
2. He was paid to ramp the stock.
3. He was paid for other building/on-site services.
4. He was paid for organising site visits.
Hard to say for sure but he was unnaturally keen to recruit mug punters to visit the mine and he did appear to have access to all areas so I would favour 2, 3 or 4. He also seemed to have insider knowledge which led to him erasing his social media accounts and abandoning the forums so it looks like he was running scared of something.
BP - directors' shares, like yours, will be worthless. But in the event of, say, a pre-pack administration, the directors could all be granted shares in a new 'Phoenix' ScotgoldCo - unlike you.
Take your pick from the likely options but I think pre-pack administration looks favourite:
https://www.phoenix-business.co.uk/?gclid=CjwKCAjwu4WoBhBkEiwAojNdXrm9FAhidgJTQqMUImLr4PA1HQk_9iAEvrwBcdzW-MgxZDtcMsJfAxoCpyMQAvD_BwE